The focus of this blog is on the wonders of government-run health-care everywhere but I also note the damage done to private medicine by a legal system that supports predatory litigation.

The long-established socialized medicine systems in Britain and Australia are a particularly relevant warning about where such systems end up.

Posts by John J. Ray (M.A.; Ph.D.)

Saturday, January 09, 2010

Three Questions for the Congressional Leadership

Are you "open," "honest," and ethical"? These three questions to the Congressional leadership form the crux of a new paper released today by the National Center for Public Policy Research in Washington.

* Is it "honest" to hide the true cost of your legislation with budgetary gimmicks in which three years of new taxes precede the bulk of the spending, making your program seem more affordable than it really is in an artificial budgetary window?

* Is it "open" for the Congressional leadership to "secretly craft the final bill behind closed doors," far from the prying eyes of the press, the public, and the rest of Congress, or to have important procedural votes in the middle of the night, or pass critical legislation on Christmas Eve, when most sane people are blissfully distracted from the machinations on Capitol Hill?

* Is it "ethical" to buy the votes of recalcitrant members of your caucus with hundreds of billions of taxpayer dollars in backroom deals, such as "the inclusion of $100-$300 million in added federal aid for Medicaid recipients in Louisiana, the home state of Sen. Mary Landrieu," in return for her vote, or the offer to Senator Ben Nelson of "a permanent exemption from the state share of Medicaid expansion" for his home state of Nebraska, in exchange for his vote?

"Despite promises made by Congressional leaders, they have shepherded health care legislation through Congress in a manner that is demonstrably secretive, unethical and dishonest," says Patterson. "Promise after promise made by the Congressional leadership to conduct an open, bi-partisan process to reform health care has been shamelessly broken. It's really quite astounding; Nancy Pelosi, Harry Reid, and Barack Obama, don't even try to pretend to hold to their many and frequent promises to conduct open and fair negotiations to reform American health care."

Patterson concludes: "The question we have to ask ourselves is: Why have they done this in secret? What is it about this process that they don't want the public, the press, or even fellow members of Congress to see?"

Fueled by voter dissatisfaction over the government takeover of the nation’s health system and the unbridled expansion of government as a whole, 2010 is already shaping up to be a plus-year for Republicans. A growing consensus in Washington suggests that Republicans stand to pick up a windfall of seats in both houses of Congress. As reported by the Washington Post, “Democrats now face the evaporation of their 60-vote filibuster-proof majority in the Senate and losses in the House that a number of strategists across party lines conservatively estimate in the range of 20 to 25 seats.”

Since late-June, Republicans have led Rasmussen Reports’ generic Congressional ballot, numbering 28 weeks in a row. Since then, their lead has not abated, nor has their support dropped below 40 percent. Today, their lead stands at 44 percent to 35 percent — a 9-point spread — indicating a growing trend in their favor.

The key question is “Why?” Other polling by Rasmussen suggests that the answer largely lies in public opposition to the Democrats’ health care takeover. Quite simply, it’s an Albatross around the necks of Congressional Democrats, especially for vulnerable members who voted in favor of it. Since Rasmussen’s September 13th-14th poll, opponents of ObamaCare have outnumbered supporters in every single poll the organization has taken. In fact, supporters have only outnumbered opponents twice throughout the entire year: in the June 27th-28th poll (50 to 45 percent) and in the September 11th-12th poll (51 to 46 percent). And that was out of 31 polls taken. Today, opposition is holding with 52 percent against the legislation, and only 42 percent in favor. Making matters worse for Obama and the Democrats, a recent Quinnipiac University poll showed Independents opposing the legislation by a staggering 58 to 30 percent.

The key point: as opposition to ObamaCare has intensified, Republicans’ lead in the generic ballot has expanded. And support for Obama and Democrats across the board has plunged.

Which is not at all surprising. This is, after all, the same legislation that would ration health care away from seniors, raise taxes by hundreds of billions of dollars, take private choices away from the American people and force them onto government-run plans, and bankrupt the Treasury with an another unsustainable entitlement.

In short, while Medicare and Medicaid are going bankrupt and every year depend on more taxpayer funds drawn from general income tax revenue, Congressional Democrats have sought to expand the nation’s health care entitlement by 30-45 million. Not only is that clearly unaffordable — Senate Republicans say it will cost $2.5 trillion over ten years once fully implemented — leaders have added insult to injury by attempting to disguise the gargantuan cost with accounting gimmicks that few Americans any longer believe, as ALG News has previously reported.

In fact, the Qunnipiac poll reveals that 73 percent of voters believe Obama’s government health care takeover will increase the burgeoning deficit. And, because the government entitlement being established is so inherently unsustainable, the American people understand intuitively that it will mean that there is less health care to go around. They also understand that increased burdens on the system will mean less research and development, leading to declining quality.

All of which explains why 2010 is shaping up to be a banner year for Republicans politically. Not only are voters dissatisfied with the state of affairs, they are increasingly prepared to address the issue by ousting incumbents currently in the majority. In short, it’s not so much an anti-incumbent feeling as an anti-Democrat one. And one needs look no further than the ObamaCare Albatross vulnerable Democrats have hoisted over their own necks.

For decades, among the first thing cub reporters learned when covering local government was that the words "executive session" meant public officials were going behind closed doors to conduct business they wanted to keep out of the public eye. More often than not, the journalists barred from the meeting passed influential developers and other special interest lobbyists on their way in to confer with the decision makers. Thanks to public meetings laws requiring city councils, county boards of supervisors, and other local and state officials to meet and vote in public, it's much tougher for them to hold such clandestine gatherings.

Judging by the silence of the hundreds of professional journalists covering Congress for the mainstream media, however, it appears this lesson from Covering Government 101 has been forgotten. President Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi -- all of whom have in recent years promised unprecedented levels of transparency in government -- are flouting their own words by meeting in secret to write the final version of Obamacare. They are doing this to avoid the public meetings of a bipartisan conference committee representing the Senate and House and the multiple, on-the-record roll call votes required in both chambers on a conference committee report.

The most radical expansion of central government power in American history is happening right under these journalists' noses, and yet they raise not a peep of protest when the doors close, effectively barring them from doing their jobs at a critical juncture. Where are the Society of Professional Journalists, the American Society of Newspaper Editors, and the Radio and Television News Directors Association? These august organizations vigorously and rightfully protested former Vice President Richard Cheney's secret meetings with oil company executives in the early days of the Bush administration. They also wailed loud and long about the Bush administration's abuses, many real and some imagined, of the Freedom of Information Act.

To be sure, many of the reporters on the Hill gripe and complain to each other and to their editors about these closed-door meetings. And many of them stand keeping vigil outside the doors, waiting for Reid or Pelosi to come out and offer them a morsel of information. But that's not good enough. It's time for a sit-down protest by journalists whose first job is to uphold the public's right to know what its government is doing. Invite readers to come join them in demanding open meetings. The last thing Reid and Pelosi want is the spectacle of the Capitol Hill Police dragging protesting journalists away from the closed doors. It's time to show some cojones, people.

A massive conference call on health care legislation among the House Democratic Caucus ended Thursday afternoon with House Speaker Nancy Pelosi, D-Calif., promising her rank-and-file members she plans to make changes to the final bill that will ensure more affordability and access.

Pelosi also told the 175 Democrats who participated in the call that despite some reports, a formal conference committee has not been ruled out for merging the House and Senate version. "The Speaker answered the question of whether the White House is going to force us to just take the Senate bill and she made clear that wasn't the case," said a Democratic aide who listened to the call. "We are going to negotiate a final bill and it has to meet," the House standards.

Rep. Rosa DeLauro, D-Conn. described "a very positive call" in which members voiced their concerns about differences between the two bills, including proposed tax increases, abortion and immigration. The call also focused on implementation. The House bill calls for a national insurance exchange while the Senate bill incorporates state-wide exchanges. "A national exchange is something people want to ensure because that builds in the mechanism for lowering cost and for competition," DeLauro said.

Pelosi also told members, according to a Democratic aide, "they wanted to ensure equity," on federal reimbursement for the proposed expansion of Medicaid. In the Senate bill, some states received much more generous federal funding than others but lawmakers from other states are demanding the same deal, which could raise the cost of the bill by billions of dollars.

A new poll showing Massachusetts GOP Senate candidate Scott Brown in striking distance of Democrat Martha Coakley prompted some pundits to predict a political earthquake. Yet longtime Bay State observers say it's little more than minor tremors. Coakley, the state attorney general, leads state Sen. Brown 50%-41%, according to a Rasmussen poll released Tuesday. That's a dramatic shift from two months ago, when a Suffolk University poll showed Coakley leading by 26 points. The Jan. 19 special election will fill the rest of the late Ted Kennedy's term. Paul Kirk is temporarily occupying the seat.

A GOP victory would have major ramifications nationally. Brown would become the 41st Republican senator. That could give the GOP enough strength to block a final health care bill.

Democratic politicians across the country would be stunned. If the party loses in Massachusetts, it could lose almost anywhere in 2010. That could spur a few more House Democrats to vote no on the health care bill — enough to defeat it. Others could decide not to seek re-election.

Calling the poll "Earthquake rumblings in Mass.," blogger and Cornell law professor William Jacobson wrote: "Coakley has been a statewide figure for years, and has much better name recognition, SEIU and other union support, and the Massachusetts Democratic machine behind her. Obama won the state by over 20%, and Coakley should have had at least a mid-teens lead at this point."

The latest official figures show 37% of state voters registered as Democrats vs. 13% as Republicans. But 50% are "unenrolled." Brown leads Coakley by 65% to 21% among un affiliated voters, Rasmussen found. But the Brown camp is cautious. "The poll is encouraging, but we recognize we are an underdog in a state controlled by a political machine," said Felix Browne, a spokesman for the Brown campaign.

Tobe Berkovitz, an advertising professor at Boston University, says Brown is right to be circumspect. "This is among the bluest of blue states, and you can never forget that," he said. "Coakley starts with a huge advantage since the state elects Democrats. She also has money, and a large Democratic machine. And unions, which are important to turnout, are behind her."

But David Tuerck, executive director at the conservative Beacon Hill Institute, said Massachusetts "is not the tax-and-spend state that you might think it is. Our taxes are relatively modest and we have a wildly popular tax limitation measure at the local level." He also noted that "Massachusetts is not immune" to the declining popularity of President Obama and Congress. He thinks Brown's chances for victory are small, but that it has become a possibility.

Brown could benefit from what is likely to be low turnout. Rasmussen's poll found that among those who said they are certain to vote, Brown trails by only 2 points. "(It) is clear from the data that Brown's supporters are more enthusiastic," said a Rasmussen press release....

Dr. Darshak Sanghavi, an academic pediatric cardiologist who (like all physicians) financially benefits from the cartelization of medicine, explains in Slate, the online magazine, that health care markets can’t work because of the information asymmetry between physician and patient (“Talk to the Invisible Hand”). So we need the cartel. This is not particularly surprising; most physicians think that. But it ain’t so.

Through several examples Sanghavi attempts to demonstrate that a medical market with the customer/patient in charge just doesn’t make sense. With the U.S. government now paying half of all medical bills and consumers paying only 10 percent out of pocket, it is not surprising that Sanghavi can show that marginal efforts to move toward a market without making any fundamental changes in the system do not always work, but let’s look at his examples:

In 2004 President Clinton developed chest pain, was diagnosed with coronary artery disease (CAD) and treated with coronary artery bypass grafting (CABG). Sanghavi notes that Clinton, savvy though we know him to be, did not study New York state’s database of hospital- and surgeon-specific death rates from heart surgery. Had he done so, he might have thought twice about having the surgery at Columbia-Presbyterian in New York City, which the database lists as having “the highest death rate of any of the 35 hospitals doing bypass surgery.” Sanghavi sees this as evidence that even savvy consumers cannot deal with the complexities of the medical marketplace. But is it?

First, in a true medical marketplace, hospitals might find it profitable to advertise the results of the database, something they have little incentive to do now, when patients remain rationally ignorant of the quality of hospitals not covered by their employer-chosen insurance. More important, the database in the form developed by New York state is crude. Are you better off going to a cardiac surgeon who does 50 CABGs per year, restricting his surgery to only otherwise healthy patients with mild CAD, and has a 1 percent complication rate, or are you better off going to a cardiac surgeon who does 500 CABGs per year, takes patients refused surgery elsewhere because they’re viewed as “too risky,” and who has a 2 percent complication rate overall (but among otherwise healthy patients with mild CAD has a complication rate of 0.4 percent—though this breakdown is not in the raw data offered by the New York database)?

How can one obtain such detailed analysis of the data? One can do what Clinton did: Go with the recommendation of the cardiologists he entrusted with his care. In a true medical marketplace he’d have even more options: Businesses would develop that analyzed such data and provided their analysis for a fee (or perhaps it would be available for free on the Internet, paid for by ads, like Google searches).

Sanghavi questions whether it helps for consumers to “have skin in the game”—that is, pay some health care costs directly so they no longer treat it as essentially a free good, overusing it and driving up costs. He acknowledges that the famous RAND Health Insurance Study (1982) showed that when patients paid 25 percent of costs, overall medical spending dropped 20 percent.

But Sanghavi is concerned. He notes that consumers “cut back equally on highly effective and largely pointless treatments.” He fails to say this means that under the highly regulated system he defends, where medical experts are in charge of determining what is needed without worrying about patient cost concerns, “largely pointless treatments” are still available. Of the RAND results Sanghavi notes with a concern that can only be felt by physicians: “The cost savings came from mostly avoiding doctors altogether.” But most people who see doctors have transitory complaints that resolve on their own, caused by problems or pathologies that are never determined, no matter the expense of the workup (headache and back pain being the two most common complaints). So it is good that “the cost savings came from mostly avoiding doctors altogether.”

Most important, the RAND study showed, though Sanghavi didn’t mention it, that with few exceptions, seeing doctors less often and spending 20 percent less overall “had no adverse effects on participant health.”

Of course, if we had a competitive market in health care, with all its implications for easier access to information, broader advertising of various options, direct price competition, easier access to medications, and more, I would expect that consumers might better distinguish “highly effective” from “largely worthless” medical practices. They seem to make good choices now when given the opportunity, in areas like Lasik and plastic surgery.

For Sanghavi, “The usual rules of the marketplace seem not to apply to health care” because doctors apparently know more about medicine than patients do. So doctors control the interaction. So regulations are needed. So the argument goes.

But this argument proves too much. Information asymmetry is the norm not the exception. Car dealers know more about cars than consumers do. The guys behind the Genius Bar know lots more about computers than Apple customers do. Are consumers always being ripped off? Sanghavi the pediatric cardiologist claims—correctly, I’m sure—that no parents ever questioned him when he ordered a special type of color Doppler cardiac ultrasound on their child. But he unfortunately seems to believe a medical marketplace is everything we have now—all the regulatory burdens, supply restrictions, informational prohibitions—except patients will pay more out of pocket. He ignores various other innovations that may help consumers get what they need despite information asymmetry. For example, competing cardiologists trying to simplify matters for patients might offer flat fees, including labs and imaging, so the consumer could compare physician costs more easily and not need to know whether a specific lab or ultrasound was “needed.” Alternatively, consumers could go on the web and use the services of Medical Cost Advocate. Such services would be more commonplace in a truly free market in health care.

Some say that health care is different, and if by that they mean the health care market has been artificially restricted, segmented, regulated, and distorted by government interventions dating back more than a century, they are right. Only the educational and financial industries come close in the degree of government regulation, which doesn’t speak well of regulation’s success. But if they mean health care is more complicated than anything else offered in the marketplace or that health concerns don’t respond to supply and demand or that medical services can only be provided when medical cartels battle government payers while insulating patients from the true costs of care . . . it just ain’t so.

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Background

Postings from Brisbane, Australia by John Ray (M.A.; Ph.D.) -- former member of the Australia-Soviet Friendship Society, former anarcho-capitalist and former member of the British Conservative party.

This blog gives a lot of attention to events in Australia and Britain -- places where there already exist systems similar to the one most likely to befall the USA if the Democrats get their way -- "Free" medical care supposedly available to all through government hospitals but with a competing private sector as well. The Canadian system is considered too Soviet to provide a likely model for the USA

TERMINOLOGY: Many of my posts concern the very instructive state of socialized medicine in Australia. Like the USA, Germany and India, Australia has a system of State governments which have substantial independence from the central (Federal) government and it is they who are mainly responsible for "free" health services. It may therefore be useful to some for me to note the standard abbreviations for the States concerned: QLD (Queensland), NSW (New South Wales), WA (Western Australia), VIC (Victoria), TAS (Tasmania), SA (South Australia).

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

Conservatives do NOT object to helping the poor. Government welfare legislation in aid of the poor was in fact first introduced by conservatives -- Bismarck and Disraeli in the 19th century. What conservatives want is for the help to be delivered in a sane manner. And anyone who thinks that government bureaucracies can run hospitals well is completely out of touch with reality.

One of the oldest "free" public hospital systems in the world is that in the Australian State where I live: Queensland. It dates from 1944 (Britain's NHS began in 1948). So its advanced state of decay reveals well where the slow cancer of bureaucracy ends up. It now has three "administrative" employees for every medical employee. All those clerks are really good at curing people, I guess! Frequent bulletins on the flailing but ineffectual attempts to "fix" the system will appear here -- as well as bulletins on the dreadful things it does to patients and the long waits they endure.

On all my blogs, I express my view of what is important primarily by the readings that I select for posting. I do however on occasions add personal comments in italicized form at the beginning of an article.

I am rather pleased to report that I am a lifelong conservative. Out of intellectual curiosity, I did in my youth join organizations from right across the political spectrum so I am certainly not closed-minded and am very familiar with the full spectrum of political thinking. Nonetheless, I did not have to undergo the lurch from Left to Right that so many people undergo. At age 13 I used my pocket-money to subscribe to the "Reader's Digest" -- the main conservative organ available in small town Australia of the 1950s. I have learnt much since but am pleased and amused to note that history has since confirmed most of what I thought at that early age.

I imagine that the the RD is still sending mailouts to my 1950s address!

NOTE: The archives provided by blogspot below are rather inconvenient. They break each month up into small bits. If you want to scan whole months at a time, the backup archives will suit better. See here or here